MUHAMMAD FAISAL KAMAL ALAM, J.--- The Rice Export Corporation of Pakistan Limited, the predecessor-ininterest of the present Plaintiff, that is, the Trading Corporation of Pakistan Limited ("TCP"), a public sector company, has filed the present suit for Recovery of Rs,3,61,30,050.08 (Three Crores Sixty One Lacs Thirty Thousand Fifty Rupees and Eight Paisa) against the Defendant, with the following prayer: " (i) Decree for a sum of Rs,3,61,30,050.08 against the Defendants with interest @ 14% per annum from the date of suit till recovery.
(ii) Appoint the Commissioner to take the stocks and stores from the defendants.
(iii) Direction to the defendants to hand over the stocks in their possession to the plaintiffs.
(v) Cost of the suit.
(vi) Any other relief which this Hon'ble Court may deem fit and proper in the circumstances of the case."
2. The Defendant was the handling agent of the Plaintiff, inter alia for handling the Rice Crop 1980- 81 at the Landhi Godowns of the Plaintiff and subsequent to a bidding process, an Agreement No,RECP-5/M&M/80-81/2, dated 11.10.1980 was entered into between the parties hereto, where under, Defendant's scope of service included receiving, storing, forwarding and shipping Rice consignments, that is, to receive rice from different parts of Country at the designated Godowns and after making appropriate arrangement for its storing, the same were to be transported and delivered at the ships for further exports. Term of the Agreement was two years and under Clause- 5 whereof, it is provided that the terms and conditions contained in the Tender Form, which is appended as Annexure-I, shall form part of the Agreement. For reference sake this entire document be referred to as "Subject Contract", which has been exhibited in evidence as Exhibit 'A' as well as P-2.
3. The grievance of Plaintiff is that despite meetings, notices and reminders, the Defendant failed to render the R.S.AReserve Stock Accounts ("RSA"), in respect of rice stock and Bardana/bags in terms of the above Subject Contract.
4. Since the Defendant earlier remained absent, it was proceeded ex parte and an ex parte order dated 28.02.1989 was passed, which was subsequently recalled vide order of 19.11.1989.
5. Eventually, defendant filed its written statement and contested the suit. Primarily, the Defendant in its pleadings has taken the stance that the shortage of rice stock complained of was due to 'natural phenomenon', which takes place during the course of rice handling, and includes the process of milling, reduction of moisture and blow of dust, etc. The second defence was that the Defendant has been discriminated against as the other contractors have been allowed shortage of 4.55% and 4.77% on account of loss of moisture alone. It further complained that Plaintiff has illegally and unauthorized withheld the security amount belonging to the Defendant and has deprived the latter from use of its funds. With regard to the claim of gunny bags, the Defendant acknowledged in paragraph-5 of its written statement that since it was kept in open space provided by the Plaintiff, therefore, it got exposed to inclement weather and eventually a huge quantity was damaged/ destroyed.
6. From the divergent pleadings of the parties, the following issues were framed by the Court by its order dated 10.03.1991:- "1. Whether the Plaint does not disclose a cause of action?
2. Whether the suit is barred by limitation?
3. What Stocks of rice, gunny begs were entrusted by the Plaintiffs to the Defendants for handling, during the crop year 1980-81?
4. Whether the defendants failed to render true and accurate account to the Plaintiffs of all the stocks including rice begs etc? If so what is its effect?
5. Whether there was shortage of 4963.0914 metric Tons of rice and 167451 gunny begs of various types, in the stocks entrusted to the defendants for handlings? If so, whether the defendants can be held responsible for such shortage?
6. Whether the Plaintiffs are entitled to the relieves claimed?
7. What should the Decree be?"
7. Previously by the Judgment dated 04.06.1999, the suit was dismissed with special costs, which was impugned in H.C.A.No,268 of 1999 and vide decision dated 04.09.2014, the impugned Judgment was set aside and the case was remanded, inter alia, with observation that findings on the issues framed were not recorded and a fresh decision is to be handed down.
8. Respective parties have examined one witness each. Mr. Taha Mustafa, the then Assistant Manager of the Plaintiff, testified on behalf of the Plaintiff as P.W.-1, whereas Syed Irtiza Hussain Jaffry, adduced evidence on behalf of the Defendant as D.W.-1.
9. Findings on the above issues are as follows:- ISSUES NOS. I ............... AFFIRMATIVE AND 2 NEGATIVE ISSUES NOS.3, 4 ................. AS UNDER, AFFIR- AND 5 MATIVE, AFFIRMA- TIVE ISSUES NOS.6 ................. SUIT IS DECREED.
AND 7 REASONS ISSUES NOS.1 AND 2.
10. The Subject Contract of 11.10.1980, which is an admitted document and has been Exhibited as P- 2, clearly spells out the respective obligations of the parties hereto, inter alia, enjoins that the Defendant shall submit periodical accounts in respect of RSA (Reserve Stocks Account). Similarly, in terms of clause-7, sub-clause (g), it was the responsibility of Defendant to hire proper Chowkidars/ Guards in respect of the Plaintiff's God owns in order to handle the stocking/ storing of rice in a diligent manner.
11. According to Mr. Ghulam Muhammad bars, the learned counsel for the Plaintiff, the main reason for bringing the present action against the Defendant is that latter failed to submit RSA about rice and bags. Hence, existence of a contractual relationship is not in dispute and if a party is complaining about its breach, it can seek a remedy. In the present case,. The Plaintiff has a right to sue, therefore, the facts of the plaint and evidence that has come on record do disclose a cause of action for filing the pr,sent suit. With regard to issue of limitation, the last correspondence, which had been exchanged between the parties is Exhibit-9, a letter of 24.11.1985, addressed to the Defendant by the Plaintiff, wherein unaccounted for quantity of 4963.0914 metric tons of Basmati rice, 36383 Hessian Bags, 46139 number of BIT will Gunny Bags and 84929 other serviceable bags, has been specifically mentioned. The present suit has been filed on 05.10.1987, that is, within a period of three years from the above last correspondence, which can be termed as a formal demand letter served upon the Defendant, calling upon, to either produce the RSA or make good the loss, hence the instant suit is not barred by limitation, therefore, Issue No,1 is answered in Affirmative, whereas Issue No,2 is answered in Negative.
ISSUES NOS.3. 4 AND 5:
12. Since these issues are interlinked, therefore, same can be decided by a common finding. In terms of the above referred Subject Contract, different specifications/types of rice stock and bags, including gunny bags, were received from time to time by the Defendant as a rice handling contractor of the Plaintiff at the designated God owns mentioned in the Subject Contract. In paragraph-5 of the plaint, and Paragraphs-5, 6 and 7 of the Affidavit-in-Evidence, the crux of the Plaintiff's claim is mentioned, according to which the staff of the Plaintiff reported an inventory difference of 4963.0914 metric tons of rice and 167451 number of gunny bags of various types, approximate value of which at that relevant time was Rs,36,130,050.08 (Three Crores Sixty One Lacs Thirty Thousand Fifty Rupees and Eight Paisa). Detail was also mentioned in a table form, which was filed as Exurban "E" with the plaint, but since it was never exhibited in evidence, hence cannot be considered now. Though, the Defendant in paragraph-4 of its written statement has disputed this claim, but in the same breath has acknowledged that "the alleged shortage was due to some natural phenomenon". This stance of the Defendant has already been mentioned herein above. In its written statement, the Defendant has also relied upon a Report, which though was never produced in evidence, but during arguments the said report has been referred to by the Plaintiff's counsel. It is clarified that this Report, which was filed by Defendant with its C.M.A.No,1155 of 1995, has been seen merely as a tool of assistance for deciding the present controversy and not as a piece of admissible evidence. This Report was prepared by a Committee constituted by the Plaintiff Board, inter alia, to carry out a study about possible loses in rice handling in comparison to other rice producing, exporting and importing countries. Concluding part of this Report is paragraph-31, which, inter alia, states that as per international practice 6 to 7% loss in weight takes place, but in the same subparagraph (2), it is also mentioned that in the Plaintiff's case such loss should be around 2%. Even this Report does not corroborate the stance of the Defendant, as no one can be allowed to approbate and reprobate at the same time, which has been done by the Defendant by relying upon a figure of 7% (of this Report) in its Written Statement, in order to justify shortfall, which though in the above Report is only cited as an international market practice, but conveniently ignoring the figure of 2%, which is actually applicable in the present case. Hence, the present issues at hand have to be decided through appraisal of evidence adduced by the respective parties.
13. In his affidavit-in-evidence, the P. W.1 has specifically deposed that the documents Exh.P/9 and P/10, which have been mentioned in his paragraph-5 of Affidavit-in-Evidence as Exhibit-H (Exb.P/9), that is, the above referred letter of 24.11.1985 (a formal demand letter) and Exhibit-H/1, H/2- Exb P/10-a Final Statement of inventory, showing the final figures of unaccounted for rice stock and bags. The said P.W.-1 testified that the above Final Statement-Ex.P-10 was jointly prepared by the concerned official of the plaintiff and also bears signature of the Defendant. It was further deposed that Exh.P/10 has two portions; in first portion under the heading of BASMATI a balance of 4964.2624 has been shown, whereas in the second portion relating to bags, a balance of 167451 is mentioned, which in fact is the claim of Plaintiff. This assertion has not been controverted by the Defendant's witness-D.W.-1 in his evidence, instead, the said D.W.-1 in his cross-examination has admitted that said Exhibit-P/10 was prepared on the basis of Defendant's statement. However, in his cross-examination, the Defendant's witness has stated that the difference of 4964.26-24 metric tons is Mill balance, that is, the rice stock lying at Mill for processing; in other words, defendant's witness refuted the claim of Plaintiff that an unaccounted for rice stock is outstanding against Defendant, but, actually was lying there in the Mill-the Rice Cleaning Plant, which was being operated yvithin the same premises of the subject God owns and generally referred to as 'Mill'
Interestingly, an inconsistency can be observed in same portion of the deposition of P.W.-1 (Taha Mustafa). The said P.W.-1 either due to lack of knowledge or for some extraneous factor, in his cross-examination has confused the issue by stating that the above mentioned quantity of rice stock was lying at the Mill, (above Rice Cleaning Plant). In other words, said portion of P.W.-1 testimony was contrary to his Affidavit-in-Evidence as well as unchallenged documentary evidence having greater penitentiary value.
14. One factor, which cannot escape notice, is that in its Affidavit-in-Evidence the Defendant's witness has attempted to setup a new case by stating that the entire contract was performed under supervision of the Plaintiff (Paragraph-5 of the Affidavit-in-Evidence). Similarly, many new paragraphs were added in the Affidavit-in-Evidence, which were not there in the written statement and this very fact has been acknowledged by the said D.W.1 in the following words:--- ' "It is correct that paras Nos.4 to 21, 23, 25, 27, 28, 29 of Affidavitin-Evidence are not included in written statement".
15. It has also been acknowledged by the D.W.1 in his cross-examination that factum of 4963.0914 metric tons of rice stock lying in the Mills was never mentioned in the written statement. At the end of his cross-examination, the said witness of the Defendant has also admitted that 16745 numbers of bags were balance in Godown but all were damaged under the handling of the Defendant.
16. The relationship between the parties is covered by the undisputed Subject Contract (Exh.A/P-2) and examination of its stipulations lead to the only conclusion that the status of the Defendant in respect of goods in question was that of a bailee.
17. Mr. Ghulam Muhammad Dars, learned counsel representing the Plaintiff, has strenuously argued that sections 148, 160 and 161 of the Contract Act, 1872, are fully attracted to the present dispute. He argued that the Defendant being bailee is liable to make good the loses and to controvert this assertion, onus is on the Defendant to show that he performed his part of contract in a faithful and diligent manner, which onus the Defendant has failed to discharge. This submission has substance; in terms of Section 151 of the Contract Act, 1872, the bailee has to exercise due care and diligence in respect of goods bailed to him and under Section 161, it is the bailee, who is responsible if the bailed goods are not returned, delivered or tendered on the proper time and if this default results in any loss, then it is the liability of bailee. Learned counsel, in support of his above contention, has cited Judgment of this Court reported as 1988 CLC 1381 (Messrs Mastersons v. Messrs Ebrahim Enterprises and another). The learned Judge besides holding that burden of proof is on bailee to show that he made appropriate arrangement for the discharge of his statutory duty, has also expounded principle of res Pisa sequitur (things speaks for themselves). As an analogy, the learned Judge has also referred to Section 116 of the Customs Act, 1969, and held that the warehouse keeper shall be responsible for the custody of goods lodged in his warehouse. In the present case, the stipulation of the Subject Contract is clear, so is the admission of D.W.-1, to the effect that the Chowkidar (guard) inside the Godowns was under the control of the Defendant. It was further admitted by the said D.W.-1 at the start of his cross-examination that it was the responsibility of the Defendant to handle stock and store within the Godowns in consideration of payment.
18. The Defendant has neither pleaded nor stated in the evidence about any default on the part of Plaintiff in making timely paym ents to the Defendant for their services as rice handling contractor, therefore, if the Plaintiff fulfilled its part of contractual obligation then the Defendant is also saddled with a liability to discharge its statutory obligation being bailee of the goods and a contractual obligation as contractor. After appraisal of the evidence, it has been proved that Defendant had failed to submit periodical RSA and upon a joint survey when a Final Statement of rice stock and bags was prepared which is exhibited as Ex. P-10 , it shows the inventory/quantities of rice stock and bags about which the Defendant could not account for.
19. Adverting to the evidence of the Defendant that a quantity of 4963.0791 metric tons of rice stock was lying in the Mill, loses its value, as this was never pleaded by the Defendant in written statement and this very fact has been acknowledged by D.W.-1 in his cross-examination. At this point of law, the two following decisions cited by learned counsel for the Plaintiff, are of relevance and the principle laid down thereunder is applicable to the case in hand:-
(i) 2014 SCMR 914 (Muhammad Nawaz alias Nawaza and others v. Member Judicial Board of Revenue and others),
(ii) 2013 CLC 1406 (Mst. Ghazala Yasmeen and others v. Sarfraz Khan Durrani).
20. The gist of the above decision is that no evidence can be led beyond pleadings and a party cannot be allowed to improve its case through evidence if its (fresh) stance has not been setup in the pleadings.
21.. D.W.-1 testimony to the effect that unaccounted for stock was actually lying at Mill, is also outweighed by the undisputed documentary evidence, viz, Subject Contract, correspondences exchanged between the parties hereto with regard to rice stocks, non-submission of periodical RSA by the Defendant. These correspondences are exhibited as Exb.P/3, P/4, P/5, P/6, P/7, P/8, P/9, and most significantly Exb.P/10. It is a cardinal principle of law of evidence that undisputed documentary evidence excludes the oral evidence; Article 102 of the Qanun-eShahadat Order, 1984. It is a well-entrenched principle and has been discussed in detail by Mr. Justice (Retd.) Khalil- urRehman Khan in his treatise on Law of Evidence (Qanun-e-Shahadat Order, 1984), Volume-II, at page 1166; the above Article 102 is an illustration of what is English Law is known. As "the best evidence rule." A reported decision in PLD 1996 Kar. Further fortifies this view and at page 210, it has been held, that Defendants are not legally entitled to adduce evidence contrary to the terms of a written statement.
22. The other reason for disbelieving the version of Defendant is that even for the sake of arguments the unaccounted for inventory of 4964.2624 metric tons rice was lying at the Mill, even then it was the responsibility and obligation of Defendant as bailee to have prepared a up to date RSA for such quantity and should have accounted for the same in its updated RSA required to be given to Plaintiff. Even in evidence, the Defendant's witness, admittedly, did not produce any documentary evidence in support of its stance and to rebut the claim of Plaintiff.
23. In view of the above discussion, even the infirmity in deposition of P.W.-1 is not of that degree which can result in dismissal of Plaintiff's claim. This part of P.W.-1's testimony is also diluted in the presence of above referred unchallenged documentary evidence. The position would have been different and to the detriment of Plaintiff, if the aforementioned undisputed documentary evidence were not there, particularly the Subject Contract and the Final Statement of Inventory-Ex.P/10, besides admission of D.W.-I in his cross-examination, which has been mentioned herein above. The contradiction in written statement and Affidavit-in-evidence of D.W.-1 goes against the said Defendant and has been described by the Honourable Supreme Court in its decision handed down in Hyder All Bhimji v. Vlth Additional District Judge, Karachi (South) and another (2012 SCMR 254) in the following expression:--- .............. The appellant was legally bound by the case set up in his pleadings. He did not have freedom to depart therefrom and raise a different case. Also that in absence of specific pleadings, the court could not allow the appellant to grope around and draw remote inferences in his favour from his vague expressions.
' In these circumstances, the Issue No,3 is answered accordingly, whereas Issues Nos.4 and 5 are answered in Affirmative.
24. Now coming to the fiscal claim of Rs,3,61,30,050.08 (Three Crores Sixty One Lacs Thirty Thousand Fifty Rupees and Eight Paisa) claimed by the Plaintiff as cost of the above mentioned rice stocks and gunny bags found short, and/or unaccounted for, which has been converted into monetary terms by pegging the cost of the above unaccounted for stock to the export price of rice prevalent at that time. This assertion as contained in the plaint as well as in paragraph-7 of the Affidavit-in Evidence was not disputed as such by the Defendant, nor the Plaintiffs witness was specifically cross-examined on this material part of his evidence; consequently same stands proved against Defendant.On this very issue, a reported decision of the Honourable Supreme Court in 1991 SCMR page-2300, is of relevance here, wherein it has been held that "where on a material part of his evidence, a witness is not cross-examined, it may be inferred that the truth of such statement has been accepted".
ISSUES NOS.6 AND 7:
25. In view of the above suit of the Plaintiff is decreed in the sum of Rs,3,61,30,050.08 (Three Crores Sixty One Lacs Thirty Thousand Fifty Rupees and Eight Paisa) with markup at the rate of 10% per annum from the date of fling of suit till realization of the amount.
26. Before parting with the judgment, I cannot restrain myself from observing that it is about time that Government Organizations and Public Sector Companies should implement Code of Corporate Governance in letter and spirit to improve their functioning. These Public Sector Companies should take litigation more seriously and to begin with, should stream line their law departments by hiring professional lawyers as in-house counsel. In evidence, only those officers should testify who are well conversant with the facts of the case. Legal departments of these organizations should act vigilantly and diligently by adopting a proactive approach in litigation.
Office is directed to communicate a copy of this Judgment to the Managing Director of the Plaintiff Company, directly.